International Criminals using crypoto currencies to make Black Money white! Money laundering is easy now

Criminals using crypoto currencies to Money laundering 

Black Money: International Criminals using crypoto currencies to Black Money:  Bitcoin Make Life Easier for Criminals, Money laundering is easy today!


Bitcoin, the most widely known cryptocurrency, has been a media sensation and an investment fad recently, reaching highs of $2,000 per bitcoin. However, for all of bitcoin’s potential for financial good, it lends itself well to illicit goals. It can be a tool for cycling black money and money laundering.

Money laundering  Black Money,

Money laundering 
Black Money:

Simply put, the technological innovation of cryptocurrency, accompanied by its positive attributes, has ushered in a “dark side” in which its most fundamental idiosyncrasies – speed, secure transfer and value with limited personal data exposure – are exploited by hackers and criminals to secure illicit objectives and carry out cybercrime. Most notably, bitcoin can be used to trade in illegal substances, weaponry and cycle black money, which is, ‘money that is earned through any illegal activity controlled by country regulations..’

Bitcoin imposes no obligation on users to verify their identity, operating without charge and without any centralised vetting procedure. There is no requirement of proof of identity, legal name or address. There is no central oversight and no third party to secure transactions as it is an entirely peer to peer system. Consequently, it lends itself well to users who need to make transactions without trusting the other side.

The lack of a central intermediary means it is less amenable to regulatory oversight than other forms of payment. Further, bitcoin does not restrict the sales of items as compared to credit cards, which can restrict types of sale in certain instances. Lastly, bitcoin payments are irreversible, as the system does not grant an avenue for a payer to reverse an accidental or unwanted purchase.
Crime and Bitcoin

With bitcoin came the ability to conduct several types of crime: bitcoin-specific crime, bitcoin facilitated crime and money laundering. Bitcoin can suffer from attacks to its infrastructure, such as theft and denial of service attacks aimed at influencing the exchange rate of the currency.

The lack of central authority presents law enforcement agencies with difficulties due to the novelty of the situation such as: what jurisdiction is responsible, the technical complexity as well as the extent of the crime. Bitcoin can also be used to facilitate crime, most notably in its use as payment for unlawful services, from illegal goods to extortion.

Criminals are perhaps drawn to bitcoin due to the lack of authoritative oversight from a central figure, the irreversible transactions or the anonymity it provides. This can facilitate money laundering, as users can utilise multiple accounts to increase the difficulty of tracing funds on the ledger, thus whilst the ledger is visible publicly, there could be an underlying set of records hidden from law enforcement on the criminal’s side of operations

This can facilitate money laundering, as users can utilise multiple accounts to increase the difficulty of tracing funds on the ledger, thus whilst the ledger is visible publicly, there could be an underlying set of records hidden from law enforcement on the criminal’s side of operations

Moreover, one could seek to use bitcoin as a tool for tax evasion. With no central banking system, users are anonymous, and thus it is very easy to not report personal income in bitcoin on an individual level, facilitating people’s activity in the shadow economy.

This presents a growing issue because unless someone voluntarily reports their income, there is no way of knowing if income is taxable and this growing ‘freelance economy’ may prove very hard to track if they start transacting in bitcoin. However, the risk for bitcoin to be used on a large scale is low, as Princeton’s Edward Felten commented in a panel discussion in 2014, ‘The conspiracy to not report income has to be too large in a sizeable company, and the consequences of getting caught [for] the leaders are too large.’

On the other hand, bitcoin can also facilitate tax havens. Traditionally, Governments have defeated tax havens by working with foreign states to target links between institutions. Yet, bitcoin undermines the modern process through a series of anonymised, private transactions. A series of transactions that mix the bitcoins from input to output through a series of exchanges can break the link between the two addresses. Whilst bitcoin currently is too volatile to reliably conduct such an exercise on a large scale, the potential very much remains.

Silk Road: An Example of Black Market Usage

Silk Road was a notorious online black market, renowned as a platform for selling drugs. The site used a combination of technologies, including bitcoin, to protect the identity of high-value sellers, whereas buyers had to provide a physical shipping address for the services or product.This meant that should law enforcement officials infiltrate the site, there was very little chance of identifying sellers.

Further, the site was also run as a TOR hidden service on the dark web, meaning that ‘outsiders’ would be unable to trace the IP addresses of users or of the site itself. Eventually, through a series of mistakes by the site’s founder and operator, the FBI closed down the market and seized some 144,000 bitcoins, worth $28.5m.

This case serves as an exercise to show that if the human mistakes been removed, bitcoin and the underlying site would have remained completely capable of hiding the identities of the users.
Double-Edged Sword?

The paradox of bitcoin is that, whilst providing a pseudonymous system for transactions, it also leaves all transactional history in a publicly visible ledger, thus providing anonymity users need with an un-editable, total transactional history. This is a publicly available paper trail. Sarah Meiklejohn, a computer scientist at University College London, offers a helpful analogy:

“If you catch a dealer with drugs and cash on the street, you’ve caught them committing one crime, but if you catch people using something like Silk Road, you’ve uncovered their whole criminal history.”

The traceability and permanence of bitcoin are what can give law enforcement an edge. Should an investigator discover the address of a suspect, they have the entire transactional record in front of them, without a subpoena. Additionally, the ledger is ‘borderless’ and not subject to jurisdictional boundaries, relieving the investigator of the task of going through foreign governments.

Furthermore, should one want to exchange bitcoin into another currency, they will ultimately leave a trail when changing into fiat currency. Whilst users could have multiple bitcoin accounts, their ability to have a large roster of bank accounts is substantially limited. Moreover, bank records can be retrieved through a subpoena.

Regulatory Options

The key challenge for regulators is where to impose constraints. Firstly, it is an insurmountable challenge to attempt to regulate all bitcoin users in the network due to the quantity, geographic distribution and nature of the peer to peer system.

In this sense, regulators would be drawn to moderating intermediaries due to the volume of users going through them. However, this could lead to users avoiding such intermediaries or routeing funds through other accounts to prevent detection. Additionally, the lack of a central body regulating bitcoin increases the difficulty of this exercise.

Yet the entirely online system facilitates a somewhat easier way to regulate stolen funds, for example. Offline, it is difficult to avoid stolen or forged currencies entering circulation, yet, with bitcoin, the funds cannot be forged and the ledgers provide and un-tampered history of transactions, allowing authorities to trace the funds, albeit with the difficulties discussed above.

The Crux of the Matter

Bitcoin and blockchain undoubtedly brought a new age of economics and innovation to the table, but, as with every technological development, there are individuals that would seek to subvert the advancements for their own gain. As shown above, bitcoin, and cryptocurrencies, in general, can be used as a tool to cycle black money, avoid tax and pursue illicit goals due to the anonymity the system provides.

Yet, as identified, this is also a double-edged sword as the publicly available ledger provides a full, unalterable history of a user’s transactions. This technology, along with its potential in elections, 10 has yet to be fully understood.


A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.

Cryptocurrencies are a type of digital currencies, alternative currencies and virtual currencies. Cryptocurrencies use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger.

Bitcoin, created in 2009, was the first decentralized cryptocurrency. Since then, numerous other cryptocurrencies have been created. These are frequently called altcoins, as a blend of alternative coin.

Use of black money in Bitcoin, other cryptocurrencies under government’s radar

Even as the cryptocurrency mania is gripping the entire world –especially Bitcoin –, the government is looking into the possible misuse of such virtual currencies.

Even as the cryptocurrency mania is gripping the entire world –especially Bitcoin –, the government is looking into the possible misuse of such virtual currencies. A committee appointed by the government last year to examine issues related to cryptocurrency has submitted its report, a senior law ministry official said on Thursday.

Additional Secretary in the Department of Legal Affairs Anadee Nath Mishra said the government is also looking into the allegations that people who had black money had diverted the same to cryptocurrencies in India during demonetisation.

Earlier, the government, the RBI and the SEBI have cautioned people on investing in cryptocurrencies on several occasions. Finance Minister Arun Jaitley told the Rajya Sabha that Bitcoin was not a legal tender in India. The government on December 29 had cautioned investors to be wary of virtual currencies like Bitcoin, saying they are like Ponzi schemes with no legal tender and protection.

“There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes,” the Finance Ministry had said in a statement.

Virtual currencies not backed by government

VCs are not backed by Government fiat. These are also not legal tender. Hence, VCs are not currencies. These are also being described as ‘Coins’. There is, however, no physical attribute to these coins. Therefore, Virtual ‘Currencies’ (VCs) are neither currencies nor coins. The Government or Reserve Bank of India has not authorised any VCs as a medium of exchange. Further, the Government or any other regulator in India has not given license to any agency for working as an exchange or any other kind of intermediary for any VC. Persons dealing in them must consider these facts and beware of the risks involved in dealing in VCs.

Already issued warning

The users, holders and traders of VCs have already been cautioned three times, in December 2013, February 2017 and December, 2017, by Reserve Bank of India about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to by investing in Bitcoin and/ or other VCs. RBI has also clarified that it has not given any licence/ authorization to any entity/ company to operate such schemes or deal with Bitcoin or any virtual currency. The Government also makes it clear that VCs are not legal tender and such VCs do not have any regulatory permission or protection in India. The investors and other participants therefore deal with these VCs entirely at their risk and should best avoid participating in them.

Legendary investors from India and around the world have time and again cautioned investors to stay away from it. Thomas Carper, a senior United States Senator once remarked, “Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.”

No fundamental value

Legendary investor Warren Buffett had said in an interview to CNBC in 2014 that virtual currencies especially bitcoin is a “mirage”, adding that investors should “stay away from it”. In the same interview, Warren Buffett said, “It’s a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A cheque is a way of transmitting money, too. Are cheques worth a whole lot of money just because they can transmit money?… The idea that it has some huge intrinsic value is just a joke in my view.” Reiterating his belief on Bitcoins and cryptocurrencies, Warren Buffett told Marketwatch in October this year: “You can’t value bitcoin because it’s not a value-producing asset,” adding that it is a “real bubble in that sort of thing”.


Money laundering

Money laundering is concealing the transformation of profits from illegal activities and corruption into ostensibly “legitimate” assets.

The dilemma of illicit activities is accounting for the origin of the proceeds of such activities without raising the suspicion of law enforcement agencies. Accordingly, considerable time and effort is put into devising strategies which enable the safe use of those proceeds without raising unwanted suspicion. Implementing such strategies is generally called money laundering. After money has been suitably laundered or “cleaned”, it can be used in the mainstream economy for accumulation of wealth, such as acquisitions of properties, or otherwise spent. Law enforcement agencies of many jurisdictions have set up sophisticated systems in an effort to detect suspicious transactions or activities, and many have set up international cooperative arrangements to assist each other in these endeavours.

In a number of legal and regulatory systems, the term money laundering has become conflated with other forms of financial and business crime, and is sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing and evasion of international sanctions.

Most anti-money laundering laws openly conflate money laundering (which is concerned with source of funds) with terrorism financing (which is concerned with destination of funds) when regulating the financial system.

Some countries treat obfuscation of sources of money as also constituting money laundering, whether it is intentional or by merely using financial systems or services that do not identify or track sources or destinations. Other countries define money laundering in such a way as to include money from activity that would have been a crime in that country, even if the activity was legal where the actual conduct occurred.

Putting Pakistan on FATF watchlist will negatively affect counter-

terror efforts, Ahsan Iqbal warns

Interior Minister Ahsan Iqbal on Monday warned the global community that placing the country on the watch list of countries funding terrorism would be counter-productive and hamper joint efforts to curb terrorism, Radio Pakistan reported.

Iqbal’s statements in Islamabad today come as a week-long plenary session of global anti-money-laundering watchdog the Financial Action Task Force (FATF) is underway, where review proposals have been tabled calling for Pakis­tan to be put back on a list of countries which have failed to prevent terrorist financing.

If adopted the resolution would place Pakistan on the FATF grey-list of “jurisdictions with deficient anti-money laundering regimes”, where it was from 2009-15. In November 2017, the International Coopera­tion Review Group in Argentina adopted a resolution calling attention to Pakistan’s support to the Lashkar-i-Taiba, Jaish-i- Moh­a­mmad and affiliated groups like Jamaatud Dawa.

Pakistan’s de facto finance minister, Miftah Ismail, told Reuters last week that the United States and Britain had put forward a motion to place Pakistan on the FATF terrorist-financing watch list. Later, they also persuaded France and Germany to co-sponsor the move.


The interior minister today said that the move would hurt Pakistan’s capability to fight terrorism, and questioned whose interests would be served by putting Pakistan on the watchlist.

He added that Islamabad has been diplomatically engaging different countries to apprise them of the measures taken in the war against terrorism, adding that he hoped the international community would recognise Pakistan’s sacrifices in the war against terrorism.

The FATF is an intergovernmental organisation founded in 1989 to develop policies to combat money laundering, but after 9/11 it has focused more on preventing terrorist financing.

Over 700 delegates from the FATF global network, as well as the United Nations, Inter­nati­onal Monetary Fund, World Bank and other partners, will attend meetings from Feb 18-23.

Pakistan hopes that China, which has supported Pakis­tan in the past, will rescue it again. Pakistan has also lobbied for support with Russia, Turkey and members of the Gulf Cooperation Council.


Government of Pakistan Must raise concerns about wrong and fake allegations about money laundering and talk boldly about Cryptocurrencies. Some experts says that These crypto currencies are in market as tactics of CIA / Raw & Mosad and driven by International secret agencies for their motives although we are unable to make allegation on anyone but Still Pakistan is not to be blamed for money laundering while the whole world is involved in crypto currencies and Pakistan is not the only country to take action for money laundring alone.


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